Principal Issues: (1) Will a rollover of shares of a foreign affiliate from a Canadian corporation to another foreign affiliate followed by a transfer to a related Canadian resident corporation (that is not a “Canadian corporation”) for less than FMV trigger the benefit provisions in subsections 15(1), 56(2), 69(4) or 246(1)? (2) Will subsection 245(2) apply to the transfers? (3) Will paragraph 69(11)(b) apply?
Position: (1) In the particular circumstances, no. (2) No. (3) No.
Reasons: (1) Ruling granted previously in similar circumstances - transaction not to confer benefit – in particular, transaction at less than FMV permitted tax deferred transaction with restriction of ACB of the foreign affiliate shares to amount of the transfer. (2) The transactions are not a misuse or abuse of the Act or its provisions. (3) The “one of the main purposes” condition has not been met.